PM 2015 Supply House of the Year: Robertson Heating Supply

When Scott Robertson, president of Alliance, Ohio-based Robertson Heating Supply Co., talks about the legacy of his grandfather, founder John Robertson, it’s with a sense of pride. The company has grown from one location and a few employees in 1934 to 31 locations, 283 employees and annual revenues of more than $100 million.

Robertson attributes its success to the people at Robertson Heating Supply and its five Robertson Kitchen & Bath Gallery showrooms, as well as to a few key lessons he learned from his grandfather.

“What he instilled upon me and our company culture is a very strong work ethic,” Robertson says. “He started the company right out of the Great Depression. So you can imagine he didn’t take a lot for granted and was willing to work for what he had, and he certainly left that footprint on all of us.”

John Robertson was an innovator in the wholesale distribution industry. He developed the “twig” concept — one-man branches located in small towns that can be very profitable without opening a full-fledged branch. He was one of the first in the industry to incorporate technology into his business. He added an in-house printing and publishing department in 1946, and computers in 1947.

“We’ve continued grandpa’s pioneering success in technology,” Scott Robertson explains. “About 20 years ago, we became one of the early wholesalers to get completely involved in barcode technology. We pick each item in the distribution center and in about 10 of our branches with scanners, which is very efficient, very automated and very accurate.”

At the 217,000-sq.-ft. distribution center in Alliance, workers on two shifts pick 9,000 different SKUs per week. Any time someone picks an item, moves a product to a different area or receives product from a manufacturer, it is all done with barcoding and hand-held computers. In addition, the company runs a nightly shuttle five days a week from the distribution center to 22 branches. Orders are picked from about 8 p.m. to midnight. At midnight, five drivers take semis full of product to those branches, ensuring that those customers have access to all 13,000 SKUs housed in the distribution center.

The idea of innovation doesn’t stop there. The 81-year-old company has taken the idea of contractor training to another level. The company offers conventional classroom training on many of the products it sells, but it also has a mini video studio where very specific training sessions can be recorded for contractor customers.

Contractors also can learn how to run their businesses more efficiently and profitably from Robertson’s.

“Business training is something that Scott and others within the company began offering a few years ago,” says Sue Neil, Robertson Heating Supply’s human resources director and corporate secretary, and Scott Robertson’s sister. “It includes how contractors can grow their businesses, how they can market their businesses, how to collect from their customers and how to hire the right person. I believe our contractors benefit from these classes that they may not have access to anywhere else.”

It’s for this spirit of education and becoming involved in its customers’ businesses that Plumbing & Mechanical named Robertson Heating Supply our 2015 Supply House of the Year.

A passion for service

Another legacy from John Robertson is communication — with employees, customers and industry partners. The company founder was well-known in the industry for sharing ideas to make the wholesale distribution industry, and his company, better. Today, Scott Robertson and the company’s managers continue that tradition of communication and sharing.

“Our regional sales managers, regional operations managers, vice presidents, department heads and the president of the company are very well-known outside of this building because they’re out in the field a lot,” says Scott Middleton, Robertson Heating Supply’s vice president of marketing. “And they listen. So why do we offer business training? It’s because in one-on-one conversations with contractors, we hear about their struggles. We internalize that. It’s how new departments and new services get developed here. That’s the passion of the company. It starts at the top and it trickles down.”

For example, listening to contractor concerns about getting in touch with someone at their local Robertson branch when troubleshooting a problem on a jobsite prompted the distributor to create an 800 number call-in service center to handle contractor questions.

Robertson Heating Supply publishes many price bulletins each year — a blend of key product information and the dealer’s price — through its in-house printing department. These bulletins cost the customer $70 a year. “The benefit of these bulletins is we inform customers about price increases as soon as we hear about them,” Robertson says. “It gives contractors the opportunity to buy product before the price goes up.”

The role of the distributor is evolving, especially on the technology side, he notes. As more young people enter the workforce, they’re looking for mobile apps and more information on websites. Distributors need to address these needs of future workers and customers while keeping their existing employees and customers comfortable.

“We’re easily accessible to those younger-generation technology preferences where older companies and older generations didn’t grow up with an emphasis on technology implementation and may be slower to make those changes,” he explains.

Middleton agrees: “Today’s consumer expects everything immediately. You can buy anything on an online retail website with two-day shipping. We have to be aware of living up to the expectations of this generation and the ones coming after. I think we’re up to the challenge. We’re fortunate that our industry still takes somebody to install our products. It’s still a product tied to a service. It’s more difficult to make quick changes to that. Our company is conservative but aggressive, so we’ll change as needed.”

Another way Robertson Heating Supply helps its contractor customers is through its engineering department. The 50-year-old department now has seven engineers, based either at the corporate office or in the field, who are highly educated in HVAC and hydronics. They help contractors design projects, do blueprints of layout work, provide troubleshooting support and provide training classes for contractors’ employees.

“One of the challenges our contractors have is attracting and training newer employees, so our engineering department has a year-round schedule of training classes geared toward helping our contractors learn the HVAC and hydronics end of the business,” Robertson says.

Developing relationships

We’ve all heard that people like to do business with people they know. Developing relationships with customers — whether you are a manufacturer, a manufacturers rep, a wholesale distributor or a contractor — takes effort and perseverance. And being a good industry citizen can help establish a rapport with customers.

One way Robertson Heating Supply connects with its contractor customers is through contractor organizations. It is a member of the Plumbing-Heating-Cooling Contractors — National Association, the Mechanical Contractors Association of America, the Air Conditioning Contractors of America and the Michigan Plumbing & Mechanical Contractors Association. Robertson and others throughout the company attend the annual conventions of these contractor groups to learn what industry concerns their customers have or what problems they may be facing.

However, it’s not enough just to join an organization, Robertson notes. It’s important to attend meetings and participate, to share ideas and learn new ones. Most people say that networking opportunities are the No. 1 benefit of attending association conventions and meetings. Life-long friendships and business relationships are often the byproduct of such interactions.

“The enthusiasm, the passion, the buy-in, it starts with Scott,” Middleton says. “He is a high-energy person and that makes it fun. You know it’s work. But as you get to participate and get exposure to new people and new ideas, you see the benefit. That sense of industry citizenship filters down through the organization.”

Robertson Heating Supply is “extremely close” to its contractor customers, Robertson adds. And it offers opportunies to stay close and cement those contractor relationships with nonbusiness activities, such as incentive trips (two each year), beach Olympics, golf tournaments and Texas hold ’em tournaments.

“We try to engage ourselves with our contractors in a normal way, outside of the day-to-day business, that allows them to see we’re normal people,” Robertson explains. “We’re good people. We’re like them. I believe we do an outstanding job in that regard. We pride ourselves on the fact that we’re an above-standards, highly regarded, high-integrity company, and we’re not going to do something to sacrifice that just to make a sale.

“I think part of it comes from our grandfather, part of it comes from being founded in a small city. Only 23,000 people live in Alliance, so if you do something wrong, there’s a good chance people are going to know about it.”

Middleton adds: “We have a very high level of engagement with contractors, and even with our competitors. It’s a generational philosophy that’s part of John Robertson’s legacy.”

The events with the most participation from contractors are those that combine business and fun, Middleton says, such as pairing a tankless water heater presentation/promotion with dinner and tickets to a regional pro baseball game. Another event included a trip to a NASCAR race, where Robertson Heating Supply sponsored part of a NASCAR car and driver.

Robertson’s hosts several expos/buying shows for contractors each year. The company rents out a space, usually sports-related, and brings in a group of its vendors and a group of its contractor customers. Some of the previous venues include FirstEnergy Stadium in Cleveland, home of the Cleveland Browns; Heinz Field in Pittsburgh, home of the Pittsburgh Steelers; the “Horseshoe” in Columbus, home of the Ohio State Buckeyes; and “The Big House” in Ann Arbor, Mich., home of the University of Michigan Wolverines.

“It’s a great buying opportunity for contractors, but it’s also a relationship event,” Middleton says.

Another advantage for Robertson Heating Supply is the longevity of its workforce. About one-third of its employees have been with the company for more than 20 years and 33 employees have more than 30 years with Robertson’s, Neil says.

“We strive to be an employer of choice,” she notes. “We know our employees by name, not by number. We encourage communication and welcome employee input. We are very open about our sales figures, how we stack up against other wholesalers in the industry. I do believe our employees appreciate knowing that information. We treat our employees fairly and believe they appreciate the perks that we give them.”

Along with high wages and excellent benefits, Robertson Heating Supply offers employees a corporate goal payout. After certain goals are met, a bonus is paid out to the employees at the end of the year.

“We provide stability and consistency to the contractors as far as who they’re dealing with,” Robertson adds.

Continuity in business is reflected by the family members working for the company. Robertson’s father, Ed Robertson, worked under John Robertson and Esmond Fogle managing the Kitchen Division and the company’s many real estate holdings; today he is the executive vice president of the company. Scott Robertson started working for the family business when he was 15 years old as a part-time warehouse worker. He worked in various positions throughout the company before taking over as president in 1991.

Neil joined the company in 1981 working in the printing department before moving into the tabulation department (the forerunner of the company’s IT department). She had several secretarial positions (including with her grandfather and her brother) before becoming the HR director in 1997. Robertson and Neil’s sisters, Lori Keller and Linda Wonner, work part-time in the accounts payable department.

The fourth generation is represented by Kurt Keller, who fills in at the regional branches when needed; Krystal Hancox, Neil’s daughter, is the HR assistant; and Ryan Robertson, Scott Robertson’s son, is working part-time while he finishes college, and then will move into outside sales.

Extension of a plumber’s business

Robertson Heating Supply has 31 branches in Ohio, Michigan and western Pennsylvania. More than half its business (55%) is from plumbing and hydronics. Two growth areas for the company are radiant heating and geothermal heating/cooling.

“People want radiant heat in their garages, in their driveways, their kitchen floor, their family room floor,” Robertson notes. “It is still a relatively up and coming area that we are growing in every year. Geothermal is a very innovative, very efficient way to heat a home. It has been an exponential growth part of the business over the last five years.”

The overall hydronics category has remained flat, however, as much of Robertson Heating Supply’s territory is still dominated by forced-air systems.

Plumbing, however, continues to grow. To help its plumbing contractors, the company has five Robertson Kitchen & Bath Gallery showrooms, which are located in Cleveland; Columbus; Alliance; Lima, Ohio; and Pittsburgh.

“We have always viewed our showrooms as an extension of our plumbing contractors’ businesses,” Robertson explains. “The average plumbing contractor doesn’t have the space or the inclination to show his customers a large number of choices. So when we talk to contractors, we want them to think of our showroom staff as their employees, too. We have a business arrangement. We provide a large offering of products but given the markets we’re in, we try to be very budget-conscious — our tagline is ‘Where amazing meets affordable.’”

Each showroom works independently of the others, displaying product that reflects the communities they are a part of. All the Kitchen & Bath Galleries support the company’s key partners and offer similar promotional programs, but the product mix is different for each location.

In addition, each showroom has its own profit and loss statement. It is not part of a branch, it is an independent entity. It makes it much easier to talk about sales, profitability and expenses, as well as the success or failure of marketing programs. What works in Columbus or Cleveland may not work in Lima or Alliance.

Robertson notes that four of the five showrooms have double-digit growth so far this year. The fifth one, he notes, had a record-breaking year in 2014, so it’s been challenging for it to surpass those numbers.

“The success of our showrooms — and our company — is the people,” he says. “People who are involved in their communities, working with their contractors and developing a strong bond.”

Company snapshot

Headquarters: Alliance, Ohio. Distribution center is 217,000 sq. ft. with a 36-ft.-tall ceiling and 33 loading docks.

Territory: Michigan, Ohio and western Pennsylvania, as well as the border of Indiana and West Virginia.

Market segments: Plumbing, hydronics (55% total) and HVAC (45%).

Employees:283.

Top management: Scott Robertson, president; Ed Robertson, executive vice president; Sue Neil, HR director and corporate secretary; Geoff Alpert, vice president of sales; Scott Middleton, vice president of marketing; and Kevin Duro, vice president of operations.

Top vendors:American Standard, BrassCraft, Cash Acme, Cerro, Charlotte Pipe & Foundry, Delta Faucet Co., Elkay, InSinkErator, Legend Valve, Maax Aker, Moen, Mueller Industries, Oatey, Rheem Mfg. Co., Sioux Chief, Sterling Plumbing, Viega, Ward Mfg., Watts Water Technologies, Weil-McLain and Zurn Industries.

Website: www.rhs1.com